What is the difference between flexible expenses and fixed expenses?

Whats the difference between “fixed” and “flexible” expenses? Fixed: expenses that are the same every month. Flexible: expenses that can change from month to month.

What are flexible expenses?

Flexible expenses are costs that are not considered to be fixed or set, but can be reduced or increased on an as-needed basis.

What is an example of a fixed expense?

Common examples of fixed costs include rental lease or mortgage payments, salaries, insurance payments, property taxes, interest expenses, depreciation, and some utilities.

Is a car payment a flexible expense?

Typical fixed expenses include car payments, mortgage or rent payments, insurance premiums and real estate taxes. Typically, these expenses can’t be easily changed. That’s because fixed expenses tend to take up the biggest percentage of your budget.

How do you calculate flexible expenses?

To compute the value of the flexible budget, multiply the variable cost per unit by the actual production volume. Here, the figure indicates that the variable costs of producing 125,000 should total $162,500 (125,000 units x $1.30).

Does flexible budget include fixed costs?

A flexible budget adjusts based on changes in actual revenue or other activities. This approach varies from the more common static budget, which contains nothing but fixed expense amounts that do not vary with actual revenue levels.

What is an example of a flexible expense?

Flexible expenses are any non-essential cost that can be changed, reduced, or eliminated to help balance your budget. Flexible expense examples include groceries, dining out, entertainment, and even utilities.

Is eating out a fixed expense?

The term is frequently contrasted with “variable expenses,” which are less predictable costs like clothing purchases or eating out. Fixed expenses may be month-to-month or yearly charges like rent or mortgage payments, insurance, car payments and utilities like phone and cable bills.

Is gas a fixed expense?

Utilities– the cost of electricity, gas, phones, trash and sewer services, etc. However, utilities are generally considered fixed costs, since the company must pay a minimum amount regardless of its output.

What are 5 expenses that are flexible?

Flexible expense examples include groceries, dining out, entertainment, and even utilities….Here are some common non-essential variable expenses:

• Cable Television.
• Subscription Services (Netflix, Hulu, Amazon Prime, etc.)
• Clothing.
• Dining Out.
• Entertainment (Movies, music, books, etc.)

What are fixed periodic and flexible expenses?

Periodic Expenses: Fixed expenses are costs that have a set price per month. These expenses include things like rent and car payments. Flexible expenses are any monthly expenditure that can easily be changed, reduced, or eliminated from your budget.

What are examples of flexible expense?

An inflexible household budget can lead to a lot of stress if an unexpected cost arises. Grocery shopping is an example of a flexible expense. Flexible budgets are key to ensuring unexpected expenses can be covered.

What are flexible expenses examples?

An example is savings which is a fixed expense when you save a certain amount each month and flexible when you save an additional amount from money left over after paying bills and other necessary expenses. Another example might be your phone bill. The bill is a fixed expense because it is due every month.

What are the most common fixed expenses?

Housing, utilities and telephone, transportation, life and disability insurance and childcare are common fixed expenses. Some people also include payroll deductions such as group health insurance and court-ordered payments like child support or alimony in a fixed expense list.

Which of these is an example of a flexible expense?

Grocery shopping is an example of a flexible expense. This is in contrast to fixed expenses, where there is no control over the amount of the expense. One example of a household fixed expense is the monthly mortgage or rent payment. It is important to pay the same amount each month in order to be considered current with the debt.